3D Systems Corporation (DDD) shares have risen nearly 22% since their 52-week lows back in early November. During the third quarter, the company reported revenue that fell 2.2% to $152.9 million – missing consensus estimates by about $10 million – and its net loss of 20 cents per share missed consensus estimates by 32 cents per share. The stock responded to the news by falling about 20% lower on Nov. 1 after the market opened.
Analysts have remained mixed on the stock. Stifel Nicolaus maintained its Hold rating following the earnings announcement, but the firm lowered its price target to $11 per share from $15. Stifel Nicolaus expects 3D Systems' margins to come under pressure from higher operating expenses in the near term as it attempts to implement organizational changes. Meanwhile, Piper Jaffray analysts upgraded the stock to Neutral from Underweight, citing new products coming out next year, but maintained a $10 price target. (See also: 3D Systems Sinks, Lags Q3 Earnings, Withdraws Guidance.)
From a technical standpoint, the stock may be forming a rounded bottom as bulls look to close the gap made from its third quarter earnings announcement. The relative strength index (RSI) remains neutral at 52.64, but the moving average convergence divergence (MACD) remains in a bullish uptrend dating back to mid-November. The stock has been regaining momentum since making its 52-week lows, but the prevailing trend remains lower.
Traders should watch for a breakout from R1 resistance at $9.83 to the 50-day moving average and R2 resistance at $10.84 if the stock continues its move higher. The gap would be closed if the stock moves to around $11.50 to $12.00 per share. If the stock moves lower from these levels, traders should watch for a move lower to the pivot point at $8.88 or a move to retest prior lows near S1 support levels at $7.87. (For more, see: Is 3D Systems Too Expensive for Its Turnaround?)
Chart courtesy of StockCharts.com. The author holds no position in the stock(s) mentioned except through passively managed index funds.